Mumbai: Revealing the methods of operation in the multi-crore rupee accounting fraud at Satyam Computer, its ex-CFO Vadlamani Srinivas has told the apex accounting body ICAI that the company’s sales were inflated and bank statements had been forged to justify the claim.
“He (Vadlamani) told the Institute of Chartered Accountants of India team that they (former Satyam management) only inflated sales. He said they (the firm) have 600-odd major clients, some of whose sales receipts were doubled.
“Then they showed in the (fake) bank statements that they received the money within 90 days,” ICAI President Uttam Prakash Agarwal told reporters here.
According to Agarwal, Vadlamani said the whole scam started as an adjustment of Rs10 crore around five to six years ago and the malpractice continued quarter after quarter before it attained unmanageable proportions in the second quarter of 2008.
“He told us that for many years, they kept the money in a current account. Then in 2006, two analysts asked them that when Satyam has so much cash and bank balance, why did they want to raise funds?
“It was then that Ramalinga Raju (founder and ex-Chairman of Satyam) showed the money as fixed assets instead of bank balance by creating FDR receipts,” Agarwal said.
According to Agarwal, Vadlamani said all confirmations and external statements were provided to the auditors by the Satyam management.
“Vadlamani told us that they made it (books) in such a way that nobody could find out anything. It’s a failure of internal procedure, as even they could not ring an alarm,” Agarwal said.
Vadlamani Srinivas also told the ICAI that the fraud had been “masterminded” by Satyam’s founder and former chairman, B Ramalinga Raju, and his younger brother and the company’s former managing director, B Rama Raju, the ICAI President said.
Vadlamani and the two former Price Waterhouse auditors, S Gopalakrishnan and Talluri Srinivas, were on Sunday questioned by Agarwal and Shantilal Daga, a member of the high-powered ICAI committee investigating the Satyam case, at the Chanchalguda Central Prison in Hyderabad.
“The CFO expressed his regret and shame at having been a party to the scam. Vadlamani said it was abetted by him in planning and by G Ramakrishna (Vice-President, Finance) in its execution,” Agarwal said.